Independent’s move online does not reflect wider sector

The births, deaths and marriages column is a well-read newspaper fixture. Indeed, News Corporation chairman Rupert Murdoch chose to announce his engagement to Jerry Hall in the marriages column of one of his own papers, The Times, just last month.

Now newspaper publishers are generating some hatchings, matchings and despatchings notices of their own. The Independent has announced the death of its print edition, although it plans to live on in online form. And Johnston Press has made a sort of arranged marriage, acquiring sister title i from the publisher of TheIndependent in a £24m deal.

Meanwhile, the birth of a new national newspaper appears imminent with the expectation that Trinity Mirror will confirm the launch of New Day – seen as a rival to the cut-price i – later this month.

Gosh! For an industry that many view as being SO last century, there’s a lot going on.

Somewhat inevitably, TheIndependent’s decision to stop printing has generated plenty of headlines about the death of printed newspapers. However, a look at the latest national newspaper circulation figures (see boxout) shows just how piffling TheIndependent’s print run had become in comparison to the rest of the market. At a little over 56,000 its circulation was less than half that of the next-lowest circulating title, The Guardian.

What’s also revealing about the table is just how many people still buy a daily newspaper, despite the plethora of freely available online news sites, apps, and news feeds, not to mention the free dailies. At the same time it’s clear that newspaper groups are struggling to adapt their business models to a changing world order.

Wan-Ifra (the World Association of Newspapers and News Publishers) noted a “profound shift” in the newspaper business model in its World Press Trends 2015 report, when it stated that circulation revenues were higher than advertising revenues for the first time this century.

“The basic assumption of the news business model – the subsidy that advertisers have long provided to news content – is gone,” says secretary general Larry Kilman.

And print has gone from being a ubiquitous marketing channel that would likely enough be an automatic choice for many advertisers, to just one option amid an explosion of alternative digital channels. That said, worldwide print advertising in newspapers was still worth $77bn (£53.6bn) in 2014 according to Wan-Ifra, compared with digital at $9.5bn.

“Yes, it certainly is a challenging and at the same time interesting period for the newspaper industry,” says Steve Whitehead, managing director of the three enormous Newsprinters print sites.

“We are well and truly in the ‘disruptive decade’ but we are innovating and investing. For example, The Sunday Times re-launched its magazine last weekend, which was really well received, demonstrating our continued investment in this quality brand.”

Newsprinters made a huge £650m-plus investment in re-equipping its print operations less than a decade ago, and has since added the capability to add variable content with high-speed heads from Kodak.

“We have to recognise that we are operating in the most competitive media environment in the world and we are seeing ongoing consolidation. So it is essential that we not just identify brand extension potential but also look at how we can reduce our costs through continuous improvement and efficiency,” Whitehead adds.

And despite Wan-Ifra figures that point to an overall 22% decline in UK paid-for daily newspapers between 2010 and 2014, Newsprinters alone is still producing more than 2 billion copies a year in total – that is a hell of a lot of print.

It is useful context to set against the demise of the tiny Independent. The Independent had always been a trailblazing newspaper since its foundation 30 years ago, and its founder Andreas Whittam Smith has predicted that other newspapers will indeed follow its latest lead and shift to an online-only model.

If that were to be the case there would likely be two camps: the closure of print titles that have become a dead-loss commercially due to dwindling circulations, versus titles that have adopted a successful paywall strategy and shifted most of their readers online in paying form – the FT being the obvious example of a newspaper that could potentially take that route.

More interestingly from a print perspective, the success of the affordable i newspaper, priced at just 40p compared with a more hefty £1.60 for The Independent, has resulted in a print circulation of more than 250,000. Sufficiently compelling for Johnston Press to move into the nationals market. And the niche carved out by i has obviously proved of interest to Trinity Mirror, hence its plans to launch what sounds like a direct competitor with New Day, although details were still to be confirmed as PrintWeek went to press.

Separately, free papers enjoy large circulations and long print runs – the Metro editions around the country have a combined circulation of more than 1.34 million a day.

Wan-Ifra has seen growing evidence from countries deploying sophisticated and robust multimedia metrics that it doesn’t have to be one media channel at the expense of another: “Print and digital combined are increasing audiences for newspapers globally.”

And print still pays, says Wan-Ifra, which notes that globally more than 93% of all newspaper revenues still come from print. Don’t put printed newspapers in the ‘deaths’ column just yet.

OPINION

Publishers are adapting but print remains a cornerstone

Dean Roper, director of Insights, World Association of Newspapers and News Publishers (WAN-IFRA)

The UK has one of the most competitive newspaper publishing markets in the world, and despite some of the declines in circulation and advertising, there are still some significant brands with impressive circulations – and where print is still bringing the vast majority of revenues.

It’s difficult to say if The Independent‘s move will be a one-off. Globally, the reality is that print is still the main source of revenue for most newspaper publishers. Our World Press Trends data from our 2015 survey and report even suggests that 93% of newspaper’s revenues still come from print.

Again globally, print circulation even increased during that time, but, naturally, that is largely influenced by the still booming markets in Asia.

And there are indeed exceptions, where print is becoming more a part of a portfolio, in which digital and other revenue sources are increasingly paving the way. But those seem to be exceptions.

It’s stating the obvious, but the traditional model is increasingly under immense pressure, particularly in Europe and North America, where print advertising revenue and circulation are in decline.

Like many industries today, ours is in the midst of transformation like we have not witnessed in quite some time. Publishers are experimenting across all aspects of their business. Frequency, niche print products, glossy magazines, centralised printing and outsourcing are just a few areas where publishers are testing the waters. But again, they are doing that, it’s happening globally and it’s all in the spirit of building a sustainable business.

One point regarding print that often gets lost: some of the most successful multimedia, diversified companies today still invest and innovate their print products even while curbing costs.

READER REACTION

Will other nationals follow The Independent’s move online?

Steve Whitehead, managing director, Newsprinters

“The decision to stop the print editions of The Independent is sad but it doesn’t signal the end of the industry. From a News UK perspective we are optimistic in strong brands surviving. The world-class brands of The Times and Sunday Times are showing growth and The Sun still sells almost 2 million copies a day. The UK has a vibrant and diverse market, with millions of consumers of print every day welcoming competition and further diversity, proved most recently by the news of The Mirror’s launch of a new title.”

Richard Gray, managing director, Prinovis UK

“It’s the death of The Independent, whose time has gone, not of newspapers in general. The Independent was an outlier, and this decision can’t be seen as the start of a trend. When you sit on a commuter train plenty of people are still reading newspapers. They’ll be around for a long while yet. Newspapers that are successful still generate a huge amount of cash. There might not be any growth, but as cash generators they are very, very valuable.“

David Gray, group sales director, Polestar

“The Independent was quite a unique situation, and its run length was very low. I don’t see the changes there as being a model that would roll out to other newspapers. Newspaper publishers make a lot of money from display advertising and printed supplements. As long as that’s the case there will always be a strong presence for print going forward. What’s needed are new ideas in publishing. Look at the Evening Standard, it has gone free and doubled its print run.”